Ransacked American Grocery Stores Are Still Pretty Amazing

The other night I made my first post-lockdown grocery store run. And I’ll admit it was a bit unsettling.

It was strange seeing a security guard. It was strange wearing a mask. It was strange feeling a sort of fear of my fellow shoppers. And it was really strange and disturbing to see shelves stripped of goods. The whole experience of going grocery shopping became a bit nerve-wracking.

But still: in the midst of a panic, I could look around and see dozens of varieties of ice cream. There were produce bins full of fresh fruit from all over the world. There were turkeys and smoothies and fresh bread and milk and eggs.

The abundance is staggering. Yet the fact that my mind focused on the (relatively few) empty shelves is a testament to how much wealth of variety we have to enjoy even in troubled times.

What’s my point?

I guess it’s worth being grateful for the wealth generally available to all Americans in the form of shopping choice and resilient availability of life’s necessaries (and not-so-necessaries). Even in an economic slump, which seems likely, much of that choice will still continue to be available. In the grand scheme of history, that’s pretty crazy.

I will look forward to a day when a grocery run is the same calm, peaceful, unrushed, and unafraid affair it was only a few weeks ago. But until then I won’t believe that I am living in great hardship, at least where food is concerned.

Originally published at JamesWalpole.com.

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Don’t Let Politicians Use Pandemic as an Excuse for Dictatorship

By invoking the Defense Production Act, which “authorizes the President to require acceptance and priority performance of contracts or orders and to allocate materials, services, and facilities to promote the national defense or to maximize domestic energy supplies,” US president Donald Trump has declared himself America’s economic dictator.

He’s also moved to seal the nation’s borders, even as governors and mayors have banned public gatherings, ordered businesses to close or severely curtail operations, sealed off neighborhoods, and even in some cases — San Francisco comes to mind — ordered the entire populations of cities to remain indoors.

And we’re letting them do it.

Why? Because they say it’s about “public health.”

If this was about public health,  obvious vectors for the spread of COVID-19 like the Transportation Security Administration and its airport security screening lines would have been among the first things shut down.

Your neighborhood tavern, where people are seldom closely packed unless one is trying to sweet-talk another back home, is closed. TSA agents are still making airline passengers line up to be groped and coughed on.

If it was about public health, America’s non-violent prisoners would have been released to make more room for “social distance” between the remaining prisoners, reduce staffing needs, and prevent the virus from raging through captive populations.

Some prisons and jails are releasing some inmates or refusing to take in more. But not nearly as many prisoners are being released as Americans are being made prisoners in their own homes.

If this was about public health, government would be letting the market produce, and set prices for, essential goods instead of trying to seize control of production and suppress “price gouging.”

This isn’t about public health. It’s about political power. And things are getting very ugly, very quickly.

Vladimir Putin WISHES he had the power that American politicians have seized in the last couple of weeks.

Latin American dictators are green with envy at the enthusiasm with which Americans are surrendering our freedoms.

Pardon my French, people, but WTF?

A month ago half of us didn’t trust Donald Trump, half of us didn’t trust Nancy Pelosi, and many of us trusted neither. Now all of a sudden most of us seem to be practically begging both of them, and their henchmen, to order us around.

That’s not going to contribute to the public health. It’s not going to shorten the COVID-19 outbreak. It’s just going to crater our economy and leave us less free after than we were before.

If we force the politicians to knock this nonsense off now — by ignoring their orders until they run to the front of the parade by countermanding themselves — we might get off light. A short recession, maybe, and perhaps even some politicians who are scared into respecting our rights a little bit more, for a little while.

If we keep going along to get along, we’re more likely to end up thinking of the Great Depression and Stalin’s reign as versions of “the good old days.”

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The Leiter-Caplan Socialism Debate

Last night, I debated the University of Chicago’s Brian Leiter on “Capitalism, Social Democracy, and Socialism” at the University of Wisconsin. Leiter wrote the precise resolution:

“Social democracy is preferable to market capitalism, but ultimately America will need to move towards a socialist system.”

Here’s my opening statement; I’ve debated Elizabeth Bruenig and John Marsh this general topic before.


All First World countries are already social democracies.  Their governments continue to allow markets to provide most goods and services, but they heavily regulate these markets, heavily subsidize favored sectors like education and health, and heavily redistribute income.  The U.S. is moderately less social democratic than France or Sweden, but the idea that we have “market capitalism” while they have “social democracy” is hyperbole.  If you favor social democracy, you should be happy because your side won long ago: free-market rhetoric notwithstanding, the U.S. has Social Security, Medicare, Medicare, and public education, and strict regulation of labor markets, construction, and other major industry.  My view, however, is that social democracy is a awful mistake.  Despite its bad press, market capitalism would be much better than what we have now.

Advocates of social democracy typically claim credit for three major improvements over market capitalism.  First, they’ve used redistribution to greatly reduce poverty.  Second, they’ve used regulation to make markets work better.  Third, they’ve used government funding to provide wonderful services that markets neglect.  I say they’ve greatly overstated their success on all three counts – while conveniently neglecting heavy collateral damage.

Let’s start with redistribution.  The rhetoric of redistribution revolves around “helping the poor.”  When you look at redistribution in the real world, however, this is grossly misleading.  The U.S. government spends far more on the elderly – most of whom aren’t poor – than it spends on actual poverty programs.  Programs like Social Security and Medicare are popular because they “help everyone.”  But “helping everyone” is extremely wasteful because most of the people government helps would have been quite able to take care of themselves.  Instead, we absurdly tax everyone to help everyone.

This humanitarian rhetoric rings even more hollow when you examine the most important forms of government regulation.  Domestically, nothing does more harm than our draconian regulation of the construction industry.  This regulation, primarily state and local, makes it very hard to build new housing, especially in high-wage places like New York City and the Bay Area.  It’s hard to build tall buildings.  It’s hard to build multi-family housing.  You have to waste a lot of valuable land; builders put houses on an acre of land because zoning laws force them to do so.  The connection between this regulation and exorbitant housing prices is almost undeniable.  In lightly-regulated areas of the country like Texas, business supplies ample cheap housing.  Anytime someone tells you regulation makes markets work better, just look at San Francisco’s housing market for a reality check.  And this hardly one tiny failure of regulation; housing absorbs about 40% of the average Americans’ budget.

Immigration regulation is an even more egregious failure.  The single best way for people around the world to escape poverty is to move to high-productivity countries like the U.S. and get a job.  This benefits not only immigrants, but us, because we’re their customers; the more they sell us, the better-off we are.  A hundred years ago, immigration to the U.S. was almost unregulated, giving people all over the world a viable way to work their way out of poverty.  Now, in contrast, immigration is very tightly regulated – especially for those most in need.  Economists’ estimates of the global harm of these regulations sum to tens of trillions of dollars a year, because each immigrant worker vastly enriches the world, and hundreds of millions of workers wish to come.  Again, this is the opposite of one tiny failure of regulation.

Finally, what about education, health care, and other sectors that government subsidizes?  I say these policies are crowd-pleasing but terribly wasteful.  Yes, more educated workers make more money, but the main reason is not that you’re learning useful skills.  Most of what you study in school is irrelevant in the real world.  Degrees mostly pay by convincing employers that you’re smarter, harder-working, and more conformist than the competition.  That’s why there’s been severe credential inflation since World War II: the more degrees workers have, the more degrees you need to convince employers not to throw your application in the trash.  Pouring money on education is an exercise in futility.

The same goes for health care.  Almost every researcher who measures the effect of health care on health agrees that this effect is much smaller than the public imagines.  Diet, exercise, substance abuse, and other lifestyle choices are much more important for health than access to medicine.  But these facts notwithstanding, the government lavishes funding on health care that barely improves our health.  If this seems implausible, just compare American life expectancy to Mexico’s.  Medicare plus Medicaid cost well over a trillion dollars a year, let we only live a year-and-a-half longer.

A reasonable social democrat could object: Fine, actual social democracies cause great harm and waste insane amounts of money.  But we can imagine a social democracy that limits itself to helping hungry kids and refugees, fighting infectious disease, and other well-targeted programs for the betterment of humanity.  Frankly, abolishing everything except these few programs sounds really close to market capitalism to me… and it also sounds like wishful thinking.  In the real world, governments with lots of power and a vague mandate to “help people” reliably do great harm.  This is true in the U.S., and it’s true in Sweden.  Yes, the Swedes strangle their housing industry too.

Given all this, I predictably deny that “ultimately America will need to move towards a socialist system.”  Full-blown socialist systems make social democracy look great by comparison.  Indeed, once you draw the distinction between social democracy and socialism, it’s very hard to find to find any socialist regime that isn’t a tragic, despotic disaster.  If Sweden is the jewel of social democracy, what’s the jewel of socialism?  Cuba?  Nor is there any sign that socialism somehow becomes “more necessary” as countries progress.  The main reason governments have gotten bigger over the last thirty years is just the aging of the population.

Finally, let me underscore what I’m not saying.  I’m not saying that life in the U.S. or Sweden is terrible.  In fact, human beings in both countries enjoy close to the highest quality of life than human beings have ever achieved.  My claim, rather, is that even the most successful countries in history could do far better.  I know that social democratic policies are emotionally appealing.  That’s why they’ve won.  Yet objectively speaking, market capitalism should have won because market capitalism offers much better results.

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Freedom: Don’t Let Politicians Tell You to EARN IT

The Wile E. Coyotes of the Internet — US Senators Lindsey Graham (R-SC) and Richard Blumenthal (D-CT) — are sure that THIS time  they’ve finally found a made-to-order tool that can take out the Roadrunn … er, those meddling ki … er,  the First Amendment and  Section 230 of the Communications Decency Act.

Surely, they believe, their latest super duper special Acme rocket —  the “Eliminating Abusive and Rampant Neglect of Interactive Technologies Act of 2020,” aka “EARN IT” — will finally allow them to deprive you of access to the strong encryption that protects your privacy, so that they (and every hacker on the planet) can snoop on you at will.

Here’s the cartoon character genius and deviousness of the EARN IT Act:

It doesn’t actually OUTLAW strong encryption, nor does it REQUIRE companies to cripple their products with “back doors” for law enforcement.

All it does is create a commission to establish “best practices” for Congress to pass into law.

What could possibly be the harm in that? Well, the EARN IT act would deprive any Internet platform that doesn’t implement those “best practices” of its Section 230 protection from liability for content created by parties other than itself.

What kind of “best practices,” one might ask?

“Best practices” for protecting user security? Nope.

“Best practices” for protecting freedom of speech, promoting vigorous commerce in digital goods and services, etc.? Nope.

“Best practices” for “preventing, identifying, disrupting, and reporting child sexual exploitation.”

You had to know that these cartoon character politicians were going to pull yet another “for the chilllllllldren” gag, and they lay it on thick — the words “child” and “children” appear nearly 300 times in the bill’s text.

And you have to know that among the first set of “best practices” to come down the pike will be demands that platforms prang  encryption so that law enforcement can more easily read your emails, your text messages, etc.

If you’ve thought the matter through, you probably also know that the EARN IT Act and its associated “best practices” won’t prevent or disrupt child exploitation. The strong encryption genie has been out of the bottle for decades and no number or type of “best practices” can stuff it back in. People who have something to hide already have, and will continue to use, the tools they need to hide it. The only thing EARN IT will prevent or disrupt is your privacy and freedom.

Only the innocent and law-abiding among us would be affected by the EARN IT Act, and the effects on good and important things like freedom and privacy would be wholly negative.

Graham, Blumenthal et al. certainly know this too. Don’t let them trick you into thinking they’re just harmless idiots like Wile E. Coyote.

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Reflections on Guatemala

I first journeyed to Guatemala 20 years ago, hosted by Universidad Francisco Marroquín.  Two weeks ago, I returned for a delightful extended visit, accompanied by my Spanish-speaking elder sons and former EconLog blogger Jim Schneider.  I spent over a week doing guest lectures at UFM, then gave Friday’s keynote talk for the Reason Foundation’s “Reason in Guatemala” conference.  During our trip, we were also able to visit the awesome Mayan ruins of Tikal and Yaxha.  Here are my reflections on the experience.

1. Guatemala has dramatically improved over the last two decades.  Multinational businesses are now all over Guatemala City.  Restaurants and luxury products are all over, but so are businesses that cater to average Guatemalans.  Local grocery stores are packed with familiar international brands and products.  There are multiple Walmarts.  Even Costco is there, doing business as Pricesmart.  We argued about whether the Oakland Mall was more impressive than Tyson’s I, but it was definitely a tough call.  Smartphones are naturally ubiquitous.  Whenever we strayed from the tourist areas, we saw ordinary citizens enjoying simple material pleasures like Pollo Campero.

2. When I last visited Guatemala, the high-end businesses seemed grossly overbuilt; the shiny malls were almost empty.  Now, however, Guatemalans actually seem to be consuming the fruits of progress.  The cavernous Oakland Mall was packed at lunchtime on a weekday – and the pedestrianized streets near the National Palace were full of locals.  La Aurora Zoo was world-class, but we saw no other foreign tourists.

3. Our sponsors at UFM strove to keep us perfectly safe.  For the first few days, they drove us everywhere.  Yet almost every local assured us that four guys walking around Zone 10 in broad daylight were extremely safe.  By the end, we were walking comfortably through a wide range of neighborhoods, though only by day.  Crime is clearly down, thanks in no small part to massive private security.  Even small stores often have heavily-armed guards, and razor wire is almost always in your field of vision.

5. The greatest danger to pedestrians is probably the poor sidewalks; there are many dangerous pits even in elite neighborhoods.  The problem is so dire and the cost of fixing it is so small that I’m surprised that local businesses haven’t raised money to solve it.  I know Latin America’s philanthropic tradition is weak.  Yet good publicity aside, wouldn’t the Oakland Mall soon recoup a $50-100k investment in the surrounding sidewalks?  Would local government really block this public-spirited initiative?

6. We didn’t have to walk far to see absolute poverty.  No one looked malnourished, and even kids living in shacks and huts usually wore new, store-bought clothes.  Still, we saw families living in shacks (in Guatemala City, especially near the airport) and huts (especially on the drive to Yaxha).  During one severe traffic jam, we saw kids under ten washing car windows.  We also witnessed several families of clowns busking in the streets.

7. By official measures, Guatemala is dramatically poorer than any of the Caribbean islands we recently toured, with per capita GDP of $3200 nominal and $7600 PPP.  Yet this is mightily difficult to reconcile with what we saw with our own eyes.  Overall, the Caribbean islands looked a lot like the road from Flores to Yaxha – a mixture of modest modern houses and primitive shacks and huts.  Everything else in Guatemala looked vastly better than St. Maarten or St. Kitts.  While this partly reflects higher population, the biggest contrast is that almost every Guatemalan looks like he has useful work to do.  The Caribbean islanders, in contrast, have high levels of desperate peddling and outright idleness.

8. Guatemalan prices confused not only us, but local economists as well.  Grocery prices are very high.  Guatemala’s Pricesmart and my local Costco sell many identical goods, so I can confidently say that the former’s prices were roughly twice as high as I normally pay.  Local chains were even pricier.  One prominent local businessman blamed Guatemala’s low port capacity – and impishly shared his thrilling plans to build a big new port in the near future.  Restaurant meals aren’t cheap either; everything from fast food to premium steaks costs about the same as it would in Virginia.  The only product that was blatantly cheaper than usual was Uber – about one-third of the U.S. rate.  (Since gas prices were a bit higher than in Virginia, drivers’ take-home pay must be low indeed).  Other services, such as tour guides, were also big bargains.

9. As I toured Guatemala, I couldn’t help but notice how happy the people looked, especially the women.  I wondered if my impression could just be confirmation bias, but now that I’m back home I’m confident that the contrast is stark.  Guatemalan men look at least marginally happier than American men.  Guatemalan women look much happier than American women.  You could say that this merely reflects cultural differences in expressiveness, but that strikes me as sheer stubborn denial.

10. UFM was the jewel of our visit.  UFM could well be the most beautiful of the hundred-odd universities I’ve toured in my life.   Built in a ravine, it elegantly blends distinctive architecture with gorgeous tropical flora.  UFM also hosts two stunning museums – Popol Vuh (archaeology) and Ixchel (textiles).  Best of all, UFM is an academic libertarian paradise.  The ideas and imagery of my intellectual heroes adorn the whole campus – Milton Friedman, Ayn Rand, and Ludwig von Mises are only the beginning.  Yet there is no sign of dogmatic orthodoxy.  Good manners prevail; faculty and students are eager to hear new ideas and debate old ones.   Unlike most other institutions, UFM administrators are especially intellectually engaged.  UFM President Gabriel Calzada Alvarez was overjoyed to talk ideas with my sons for hours.

11.  The students of UFM look even happier than the rest of their countrymen.  You could say this is because they’re drawn from Guatemala’s richest families, but so are Americans in the Ivy League – and those kids are hardly pictures of good cheer.  The gender gap was so big that I wouldn’t have believed it if I hadn’t seen it with my own ideas; female UFM students appear extraordinarily happy.  UFM econ’s male/female ratio is also strangely low; several of the classes I taught were virtually all-female.

12. My Guatemalan audiences took to Open Borders like fish to water.  The cultural and political threat of Muslim immigration was the sole recurring objection.  In Guatemalan eyes, Latin America and the U.S. share a common Judeo-Christian culture, so many were surprised to hear how many U.S. citizens view Latin Americans as culturally alien or even unassimilable.

13. On the latter issue, the Guatemalans are plainly correct.  Pre-assimilation to the North American way of life is prevalent and intense.  Virtually everyone at UFM speaks and understands English well.  About a fifth of the public signs in Guatemala City are entirely in English, and an additional third are in Spanglish.  The Guatemalan elite already lives the American dream, más o menos.  The average Guatemalan struggles to do the same.  A dozen different people emphatically described Guatemalans as “deeply conservative,” but Tarantino was on t.v. every time I flipped the channels.

14. Even Guatemalan libertarians rarely complained about specific domestic government policies, but if you look at their Economic Freedom of the World ranking, there is plenty to decry.  Guatemala gets great scores on Size on Government and Sound Money, and a good score on Freedom to Trade Internationally.  Yet it gets an awful score for Legal System & Property Rights, and an even worse score for Regulation.  New construction projects are all over Guatemala City, but one of the locals told me it takes 2-3 years to obtain permission to build.  Imagine how much construction there’d be if you cut the delay down to 2-3 months or 2-3 weeks!

15. So what do Guatemalans complain about?  I asked one of my classes to tell me what most bothered the average Guatemalan; then I proposed workable policy responses for each problem.  Their first answer was “corruption.”  I suggested hiring a team of Swiss or Singaporeans to take over Guatemala’s internal affairs department.  They saw the logic of importing trustworthiness, but told me that Guatemalans wouldn’t accept it.  Their next answer was “traffic.”  I proposed electronic road pricing.  They again saw the logic, and again told me that Guatemalans wouldn’t accept it – even if the gas tax were abolished at the same time.  My students also saw crime – especially kidnapping – as a grave problem.  They were almost dumbstruck when I suggested a big switch from incarceration to flogging, even though Guatemala’s indigenous peoples already heavily rely on corporal punishment.  In a poor country with heavy corruption and high crime, the case for flogging is mighty indeed.  Just ask criminal-justice reformer Jason Brennan!

16. If I had to move to another country, Guatemala would be high on my list.  First and foremost, I love the UFM community.  American liberalism and conservatism are intellectual dead-ends, and I would enjoy forever escaping from both.  I also prefer to be around very happy people, and on that score Guatemala handily beats the U.S.A.  Guatemala does have some scary features, but the longer I stayed, the more I relaxed.  Yet for now, I continue to prefer the U.S.  Wages are obviously much higher here, and PPP measures notwithstanding, a dollar goes further in the U.S. than in Guatemala.

17. The Mayan archaeological sites we visited deserve all the hyperbolic adjectives people apply to them.  The contrast between the pyramids and the palaces, however, is vast.  The pyramids you leave thinking, “Human beings made these?!  Without wheels?!”  (As well as, “They performed human sacrifices here?!  What the hell was wrong with these Mayans?!”)  The “palaces” of the Mayan leaders, in contrast, look smaller than many apartments in Fairfax.  To reverse Galbraith, the Mayan elite lived lives of public affluence and private squalor.

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Trump’s First Offer was a Better Deal for Palestine — and Israel

In early 2016, then-candidate Donald Trump pronounced himself “neutral” in the conflict between Israel and the Palestinians. He also expressed pessimism that a deal between the two sides was even possible: “I have friends of mine that are tremendous businesspeople, that are really great negotiators, [and] they say it’s not doable.”

It didn’t take Trump long to reverse himself — when it was explained to him that $100 million in campaign assistance from casino magnate Sheldon Adelson depended on such a reversal, he re-booted as “the most pro-Israel presidential candidate in history,” which in Adelsonese means “the most pro-Likud/pro-Netanyahu/anti-Palestinian candidate in the election.”

Nearly four years later — after numerous sops to Likud and favors to save Netanyahu’s premiership amidst his indictment on corruption charges, including moving the US embassy to Israel from Tel Aviv to Jerusalem — Trump unveiled his “deal of the century.” 

The deal, in summary: The Israeli regime gets everything it wants; Palestine’s Arabs get to keep some, but not all, of what they already have while giving up quite a bit.

They supposedly get a “state,” but that’s neither Trump’s nor Israel’s to give: The State of Palestine already exists and is already recognized by most other countries.

They get a “capital” in a sliver of East Jerusalem, but Israel will  annex even more Palestinian land.

The new, fake, quasi-state of Palestine will be required to “demilitarize” and trust Israel to defend it, and Israel will exercise veto power over both its foreign policy and its internal security policy.

Trump’s offer is quite a shift from his former “neutrality.” As Lando Calrissian said in The Empire Strikes Back, “this deal is getting worse all the time.” Worse for the Palestinians, obviously, but worse for Israel as well.

US aid and military support have turned Israel into a spoiled child among states. It does what it wants and gets what it wants, not because it deserves to or because it’s able to itself, but because it has a generous and muscular big brother doling out money to it and threatening to beat up anyone who questions its entitlement.

At some point, that relationship will end as all relationships do. The longer that relationship continues, the weaker, more vulnerable, and more over-extended Israel becomes.

If Israel’s regime was interested in peace, or even in its country’s survival, it would unilaterally withdraw to its 1967 borders, begin negotiating administration of Palestinians’ “right of return” to their stolen land, and recognize the existing State of Palestine.

And if Trump was really “pro-Israel,” he’d return to his position of “neutrality” in the matter. Even if it meant refunding Sheldon Adelson’s bribe, eating a little crow, and explaining another change of heart to his confused evangelical supporters.

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